Correlation Between Thornburg International and Thornburg

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Can any of the company-specific risk be diversified away by investing in both Thornburg International and Thornburg at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Thornburg International and Thornburg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg International Growth and Thornburg E Growth, you can compare the effects of market volatilities on Thornburg International and Thornburg and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Thornburg International with a short position of Thornburg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg International and Thornburg.

Diversification Opportunities for Thornburg International and Thornburg

-0.75
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Thornburg and Thornburg is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg International Growth and Thornburg E Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg E Growth and Thornburg International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Thornburg International Growth are associated (or correlated) with Thornburg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg E Growth has no effect on the direction of Thornburg International i.e., Thornburg International and Thornburg go up and down completely randomly.

Pair Corralation between Thornburg International and Thornburg

Assuming the 90 days horizon Thornburg International Growth is expected to under-perform the Thornburg. In addition to that, Thornburg International is 1.23 times more volatile than Thornburg E Growth. It trades about -0.19 of its total potential returns per unit of risk. Thornburg E Growth is currently generating about 0.05 per unit of volatility. If you would invest  3,242  in Thornburg E Growth on September 12, 2024 and sell it today you would earn a total of  40.00  from holding Thornburg E Growth or generate 1.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Thornburg International Growth  vs.  Thornburg E Growth

 Performance 
       Timeline  
Thornburg International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Thornburg International Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
Thornburg E Growth 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Thornburg E Growth are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Thornburg may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Thornburg International and Thornburg Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Thornburg International and Thornburg

The main advantage of trading using opposite Thornburg International and Thornburg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg International position performs unexpectedly, Thornburg can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Thornburg will offset losses from the drop in Thornburg's long position.
The idea behind Thornburg International Growth and Thornburg E Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.

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